ABSTRACT
The German Democratic Republic (GDR) financial system is divided into two sectors: centralised state finances and the decentralised finances of socialist enterprises and combines. The 'unitary state financial system' embraces considerably more fields of activity relating to financial policy than that, for example, of the 'public financial system' of the Federal Republic. Thus the public financial system of the GDR includes all the monetary resources established and administered by government authorities, territorial administrations and socialist production units, the financial flows circulating between the economic units and the keeping of accounts on the utilisation of state funds. The GDR economic leadership uses a whole array of different financial policy instruments to align the economic activities of the state-owned economic concerns performance targets in conformity with the plan, and to prevent an utilisation of factors of production in contravention of the plan and serving the particular interests of the individual enterprise.
